RCAPS Working Paper Series “Dojo”
RPD-13002
Myanmar’s Policy toward the Rising China since 1989
July 19, 2013
HNIN Yi
Graduate School of Asia Pacific Studies
Ritsumeikan Asia Pacific University
Corresponding Author: HNIN Yi
E-mail: [email protected]
Ritsumeikan Center for Asia Pacific Studies (RCAPS)
Ritsumeikan Asia Pacific University (APU)
URL: http://www.apu.ac.jp/rcaps/
1 International Relations in the Asia Pacific
Spring Semester, 1st Quarter, 2013
Professor: SATO, Yoichiro
(Final Report)
Myanmar’s Policy toward the Rising China since 1989
By HNIN YI
Submission Date:31. May. 2013
Graduate School of Asia Pacific Studies
Ritsumeikan Asia Pacific University
2 Contents
1. Introduction
2. Literature Review
3. Historical Background
4. Myanmar’s China policy since before 2011
5. The Impact of Myanmar’s political reforms on Myanmar-China Relations
6. Conclusion
7. References
3 Myanmar’s Policy toward the Rising China since 1989
1. Introduction
The main concern in the international relations of Asia Pacific is the factor of
China’s ascendancy on the regional and the global stage. In particular, not only Northeast
Asian states but also Southeast Asian states are much more attentive to expanding Chinese
multidimensional capabilities such as economy, military, politics and diplomacy (Ott, 2006).
Consequently, how regional states are responding to the growth of Chinese power is a
popular question in the circle of international relations debate (Vuving, 2006). The common
goals of ASEAN states are to protect their sovereignty and national interests and to protect
against the great powers’ influence in the region. Myanmar is seeking to employ the same
strategy in relation to the rising China. Since 1988, the relations between Myanmar and
China have cordially accelerated. Under the military rule, the traditional Paukphaw relations
(that is: like an elder brother and younger brother) with China was deeply entrenched in the
political and economic sphere. Both Myanmar and China mutually gained material and
diplomatic profits through this relationship (Than, 2010). However, the suspension of the
Myit Sone Dam project, the improvement of Myanmar-US relations, and the lifting of
Western sanctions after rapidly changing domestic politics in 2011 have made China alert
that it can no longer be a sole dominant power in the country (Sun, 2012).
The purpose of this paper is to examine the prospects and challenges of
Myanmar’s policy toward China since 1989 and to analyze how Myanmar has adopted her
strategy in response to the rising China with domestic and political reforms. This paper is
covered with five folds. The first section will review theoretical and past literature
perspectives on Myanmar’s China Policy. The second section will provide historical
background of Myanmar-China Relations. Then, the third section is going to describe
Myanmar’s China policy by discussing political, military and economic relations between the
4 two countries. The fourth section will discuss the impacts of Myanmar’s political reforms on
Myanmar-China relations. The fifth section will draw the conclusions on how Myanmar has
pursued her foreign policy strategies toward the rising China.
2. Literature Review
The smaller states’ strategies towards a rising power can be classified in terms
of balancing, bandwagoning, hedging, and engaging, in the context of International relations
theories: realism and liberalism (Chwee, 2000; Vuving, 2006). While balancing and
bandwagoning are two options under realism, engagement is derived from liberalism and
hedging from a mixture of the both (Vuving, 2006). Balancing in international relations is the
intention that states cooperate or seek alliances in order to avoid the influence of a stronger
power. In contrast, bandwagoning is characterized as the tendency of states, “to ally with rather
than against the winning side” (Walt, 1985). According to Evelyn Goh (2006), hedging can be
defined as “ a set of strategies aimed at avoiding (or planning for contingencies in) a situation
in which states cannot decide upon more straightforward alternative strategies such as
balancing, bandwagoning and neutrality. Instead they cultivate the middle position that
forestalls or avoids having to choose one side"(Goh, 2006). Engagement means that “a state
uses inclusion and rewards to attempt to socialize a dissatisfied power into accepting the rules
and institutions of the pre-existing international order” (Roy, 2005).
Under these smaller states’ strategies, a few scholars pointed out Myanmar’s
strategy in the face of the rising China. Sun Yun (2012) said that the best strategy for Myanmar
always stands on seeking a balanced diplomacy among strong powers to increase its profits and
leverage due to its given territorial reality. It can be called the most delicate balancing which
needs wisdom and accurate calculation. Myanmar surely does not want to be China’s satellite
5 state. On the other hand, Naypyitaw does not want to alienate Beijing. Myanmar will actually
have to redress the balance of its relationship with the US, China and other powers and bring
its foreign policy to its traditional non-aligned, balanced path (Sun, 2012). In this sense, it can
be assumed that Myanmar will have practiced the soft balancing strategy in response to the
rising China. In that case, soft balancing can be defined as “a balancing strategy involving nonmilitary tool such as international institutions, economic statecraft and other diplomatic
arrangements in order to delay, complicate, or increase the cost of using extraordinary power
by a preponderant state” (Yoshimatsu, 2012).
McDougall figured out that Myanmar’s focus on furthering cooperation policy
with China originated from the ruling junta’s isolation might have led to a bandwagoning
strategy despite strong economic ties between Beijing and Naypyitaw (McDougall, 2012).
This can be assumed that Myanmar’s strategy in responses to China can sometimes be
bandwagoning with a limitation. Poon Kim Shee (2002) stressed that Myanmar is “neither
strategic pawn nor economic pivot.” Bilateral ties of Myanmar and China are reciprocal and
mutually beneficial despite being uneven and asymmetrical (Shee, 2002). This pointed that
Myanmar focused on the engagement policy toward China.
Mg Aung Myoe (2011) argued that the relations between Myanmar and China
can be characterized as Pauk-Phaw (kinfolk) friendship. Within the context of this Pauk-Phaw
relationship, Myanmar has skillfully played the China card and still enjoys considerable space
in her conduct of foreign relations, despite being in asymmetric relations with Beijing.
Myanmar has constantly tried to change her relations with China to get her best advantage.
Myanmar’s China policy has always been standing in the middle position between
bandwagoning and balancing (Myoe, 2011). According to the past literature, it can be
concluded that Myanmar has adopted a hedging strategy in response to the rise of China.
6 Moreover, the past literature collectively implied that Myanmar is pursuing a hedging strategy
in the face of the rising China ranging from soft balancing to limited bandwagoning.
3. Historical Background of Sino-Myanmar Relations
The historical and political background of China and Myanmar plays an
important role in their bilateral relations. Since 1948, Burma 1 has established her own path in
order to protect her national interest and development. Yet, Myanmar always takes into
account the China factor in formulating her foreign policy. Myanmar policy toward China is
regarded as a combination of domestic needs and responses to external threat (Shee 2002).
Since Myanmar experienced English colonialism and Japanese occupation, the Myanmar
government regarded any westernization as a threat to her own national security. Moreover,
wedging between the two great powers, India and China, the government considered China to
pose a greater threat (Pels, 2009). Myanmar was the first non-Communist Asian country that
officially recognized the establishment of the People’s Republic of China in 1949. The
bilateral relationship has been based on the five principles of peaceful co-existence, agreed
upon by Myanmar, China and India in 1954:
•
Mutual respect for each other’s territorial integrity and sovereignty;
•
To abide by the mutual non-aggression;
•
Non-interference in each other’s internal affairs;
•
Respect for mutual equality and to work for mutual benefit; and
•
Peaceful co-existence
In addition to that, China-Burma relations rely on three kinds of relations:
people to people relations, party to party relations and state to state relations. Through state to
1
Burma is the former name of Myanmar. In 1989, the SLORC renamed the country as Myanmar and the capital
as Yangon.
7 state relations, their ties based on personal diplomacy exercised by the heads of both
countries. This started with Premier Zhou Enlai’s visit to Myanmar in June 1954 and premier
U Nu’s return visit to China in November of the same year. U Nu’s visit to China was the
milestone of Burma–China relations (Myoe, 2011) Both countries established the friendly
and cordial relationship known as paukphaw relationship based on the strength of personal
rapport between the top leaders (Than, 2010).
However, in 1962 Burmese foreign policy was added with isolationalism
under the revolutionary government of U Ne Win. In the late 1960s, the Chinese Cultural
Revolutions led to undermine bilateral relations between Burma and China. In 1967, Chinese
embassy in Burma started exhorting the local Chinese to wear badges and participate in
Cultural Revolution-style activities such as the Mao Zedong Thought study. With the
prohibition of these activities by the Ne Win government, there were riots between Burmese
people and resident overseas Chinese, especially militant Maoists. Burmese mobs in Yangon
attacked the Chinese and Sino-Burma. Moreover, Chinese support for the Burmese
Communist Party (BCP) further cooled bilateral relations. Eventually, both countries
suspended their diplomatic ties, and the bilateral relations reached the lowest level in the late
1967 (Seekins, 1997).
As the consequences of the 1967 Chinese-Burmese riot, China initiated the
“dual track” or “two pronged” approach (party-to-party as well as state-to-state) towards
bilateral relations (Than, 2003). In 1971, the Ne Win government reestablished diplomatic
relations with China by accepting a Chinese ambassador to Burma. Then, General Ne Win
paid a visit to China in order to formalize normalization of state-to-state relations through
skillful personal diplomacy despite the continued Chinese support for the BCP (Seekins,
1997). Burma sought to accommodate with the Chinese dual track policy while maintaining
friendly state-to-state relations. In March 1974, the Ne Win regime established the Burma
8 Socialist Program Party (BSPP) with the formation of one party Socialist Republic of Union
of Burma. The BSPP government sought to enhance the bilateral relations through personal
diplomacy with the visits by Burmese presidents, prime ministers and official delegations
(Than, 2003).
Bilateral relations between China and Myanmar steadily improved with China
resuming official development assistance during the second half of the 1980s. After the 1988
democracy movement, the State Law and Order Restoration Council (SLORC) was formed
and the SLORC government came to power in Myanmar. The SLORC government enhanced
closer bilateral relations between Myanmar and China. In 1989, the largest insurgent group,
the Burma Communist Party (BCP) split into four separate armed groups, the United WA
State Army (UWSA), the Myanmar National Democratic Alliance Army (MNDAA), the
Shan State Army-East (SSA-E) and the New Democratic Army - Kachin (NDA-K) (Lintner,
2000). The disintegration of the BCP removed the most thorny obstacle of Sino-Myanmar
relations (Than, 2003). Moreover, the domestic political violence of the 1988 uprising and the
cancellation of the election results in 1990 isolated Myanmar from the international
community. The western countries including the United States and European Union imposed
sanctions on Myanmar (Ganesan, 2011). As a consequence of
isolation from the
international community, Myanmar needed to get China’s back up for its regime survival.
At the same time, China demanded Myanmar’s natural resources including energy and
market for China-made products. China sought to fufill the vaccum of Myanmar by providing
some assistances ( i.e advanced morden military weapons system) as well as taking its
economic role in Myanmar. Consequently, bilateral relations between Beijing and Yangon
have significantly improved since then.
9 4. Myanmar Policy toward the Rising China before 2011
Bilateral relations between Myanmar and China have significantly improved through
the state-to-state relations since 1989. The Chinese government and the SLORC government
undertook the defense of national sovereignty and independence as the foundation of their
foreign policy. A great deal of personal diplomacy at the top levels has been pursued by both
countries. In 1989, the SLORC’s First Secretary or Secretary One Khin Nyunt made a visit to
Beijing accompanied by 24 other officials, and the incumbent SLORC chairman paid an
official visit to China with an entourage of 53 officials at the invitations of President Yang
Shangkun on August 1991. In the same way, Chinese Premier Li Peng visited reciprocally
Yangon in December 1994 with a 79-persons entourage at the invitation of Senior General
Than Shwe, the successor of General Saw Maung as the SLORC chairman in 1992. In
September 1994, Lieutenant General Khin Nyunt paid another visit to Beijing, and in 1996
Senior General Than Shwe made his first official visit to China accompanied by some of the
more visible military officers at the invitation of Chinese President Jiang Zemin (Seekins,
1997).
This visit resulted in a joint communiqué which was intended to strengthen
and enhance Myanmar-China cooperation and the traditional Paukphaw friendship.
Following a year of Senior General Than Shwe’s visit, State Councillor and SecretaryGeneral of the State Council Luo Gan paid a visit to Yangon and negotiated the three
agreements for bilateral cooperation. In 1997, the SLORC renamed itself the State Peace and
Development Council (SPDC). After that, Vice Premier Wu Bangguo came to Yangon for
signing a Framework Agreement on Preferential Loan with interest subsidized by the Chinese
government. In 1999, the Secretary one of SPDC, Lieutenant General Khin Nyunt again paid
an official visit to sign the Agreement on Economic and Technical Cooperation. At the same
10 time he met with Premier Zhu Rongji, Chairman of Chinese People’s Political Consultative
Conference, State Councillor Luo Gan, and Defense Minister Chi Hotian (Myoe, 2011).
At the same time, the SLORC government heavily relied on the Chinese
military support in order to replenish and modernize the Tatmadaw, the Myanmar armed
forces by late 1988 or early 1989 (Kudo, 2006) (Storey, 2011). In 1994 and 1996, the SLORC
regime made two substantial arms deals with China for counter-insurgency operations and
conventional land and sea war fighting by receiving military weapons such as heavy artillery,
multiple rocket launchers, patrol boats, guided missile attack craft, fighter air craft, air-to-air
missiles, electronic warfare and signals intelligence (SIGINT) equipment, and night vision
equipment (Haacke, 2006). In this way, China has provided Myanmar Tatmadaw a major
source of weapons, military training and infrastructural supports (Seekin, 1997).
The SLORC’s military ties with Beijing has mainly based on three means: first
purchasing approximately US $ 1.4 billion worth of relatively advanced weaponry from
Beijing; gaining Chinese assistance in the construction of military facilities; and applying
Chinese pressure on ethnic minority insurgents to enter peace talks with the SLORC.
Moreover, high ranking military officers of Beijing and Yangon have paid several mutual
visits in order to strengthen personal ties between the Tatmadaw and PLA. In 1994, the visit
of General Li Jiulong, the commander of the Chendu Military Region, was designed to
promote their military cooperation. In addition, the two governments established a military
cooperation agreement including provisions for intelligence exchanges in 1996. It also
continued training for military personnel in both countries (Storey, 2011). Andrew Selth
expressed that the military aid from China reinforced the Myanmar Tamadaw to transform
itself from ‘a small weak counterinsurgency force’ into ‘a powerful defense force capable of
major conventional operations’ (Selth, 2002).
11 In1997, Myanmar joined
the Association of Southeast Asian Nations
(ASEAN) to head off its over-dependence on China. During the first decade of the twenty
first century, Myanmar’s domestic political crises and Western economic sanction and
China’s veto of the US- and UK-led resolutions made Yangon more dependent on Beijing.
However, the SPDC government initiated to diversify the state’s foreign relations, with India
and Russia. (Storey, 2011). In this way, China became the friendliest partner of Myanmar in
terms of political, military and economic relations.
Myanmar–China relations are asymmetrical and uneven despite being
reciprocal and mutually beneficial. From the beginning of 2000, Myanmar–China relations
gradually became more friendly and cooperative on political, security and economic levels.
Firstly, from political aspects, General Maung Aye, Vice Chairman of State Peace and
Development Council (SPDC) visited China, on Jun 5 2000 for celebrating the 50th
anniversary of the establishment of diplomatic relations between Myanmar and China and
signing the Framework of Future Bilateral relations and Cooperation (The New Light of
Myanmar, 2000). Vice President Hu Jintao’s reciprocal visit to Yangon from 16 to 18 July
2000 provided for the signing of three agreements for future bilateral cooperation of both
countries (Myoe, 2011). These mutual visits highlighted that China greatly supported
Myanmar’s regime survival and politically reaffirmed the legitimacy of the SPDC regime.
On the other hand, the Myanmar military government took into account the
potential danger of over-reliance on China. By the late 1990s, Myanmar employed a hedging
strategy through diversifying its diplomacy and consolidating its ties with not only India,
Russia and Japan, but also ASEAN countries. Moreover, in 2001 the purchase of 12 MIG-29
fighters from Russia and the dispatch 300 military personnel to Moscow for training to fly the
MIGs and obtaining rocket technology highlighted that Myanmar was seeking an alternative
partner to balance China and India (Shee, 2002).
12 Jiang Zemin’s state visit marked the highest level for the development of
China-Myanmar relations in 2001. Moreover, this visit highlighted the significance of
pushing forward with the overall development of bilateral good-neighborly friendship and
cooperation in the new century. During his visit to Yangon, he stressed that China and
Myanmar were close and good neighbors in accordance with “a profound Pauk-Phaw
friendship fostered in the long-term and in close contacts between the two peoples” (Myoe,
2010). Moreover, Jiang gave the promise that China would contribute to implementing the
joint statement on bilateral cooperation with Myanmar in order to be good neighbors and
partners forever and keep on their friendly relationship from generation to generation.
Consequently, Senior General Than Shwe, the Chairman of SPDC, also replied to Jiang that
“Myanmar attaches importance to the comprehensive development of friendly cooperation
with China.” He was also grateful to Chinese leader for Beijing’s “generous support and
assistance over the years” (People Daily Online, 2013).
In January 2003, Senior General Than Shwe also reciprocated Jiang’s visit by
making his second visit to Beijing. On Than Shwe’s arrival in China, Jiang Zemin again
expressed that “China always maintain the policy of good-neighborly friendly relations to
cooperate with Myanmar. These mutual visits have highlighted to their deeply, friendly and
cordial relations and strengthened their economic ties (The New Light of Myanmar, 2003).
Most interestingly, India, Russia, Singapore and Thailand have also sought to
dilute Chinese economic leverage in Myanmar. Moreover, the Junta played a balancing game
through the promotion of its relations with India. Mutually, India is willing to break the
potential containment by China-Pakistan-Myanmar in its northeastern border. Chinese
military leverage in Myanmar can no longer decisively stand because of the poor quality and
reliability of Chinese weapons despite China’s status as the biggest military provider to
Myanmar. In order to attain more advanced and reliable weapons, Myanmar has turned to
13 Singapore, Pakistan, Portugal, Israel, South Africa, North and South Koreas, and Russia (Li
& Zheng, 2009).
In 2000, Myanmar–India relations were restored as Indian criticism of
Myanmar’s domestic political situation and the SPDC’s human rights record stopped. The
key motivations of India were to ward off China’s political influence in Myanmar, access
Myanmar’s energy resources, and secure Yangon’s cooperation in the fight against insurgents
in the northeastern India. Between 2000-2006, India and Myanmar paid mutual high-level
visits including SPDC chairman General Than Shwe’s visit to New Delhi in 2004 and Indian
President Abdul Karin’s trip to Yangon in 2006 (Storey, 2011).
In 2003, the crack-down on demonstrators in Depayin by the government and
the Union Solidarity and development Association (USDA) killed a few dozen of Aung San
Suu Kyi’s supporters. Daw Aung San Suu Kyi and the rest of several others were also
arrested. This Depayin incident outbreak made Myanmar’s domestic political situation worse.
ASEAN sought to pressure the Myanmar government to solve the political deadlock and
make political reforms by undertaking the unusual diplomatic initiative (Myoe, 2010). This
incident was greatly condemned by the international community and led to the hearing of the
Myanmar case at United Nation Security Council (UNSCR). As a result, the United States
and Western countries imposed tighter sanctions on Myanmar (Storey, 2011). China tried to
pressure Myanmar government to bring about political reforms because Beijing was
requested by foreign governments and international organizations to serve as a major
stakeholder.
In this situation, Myanmar leaders initiated a reform plan to head off
international criticism and to prevent further intervention in the internal affairs of the country.
After being appointed as a prime minister in August 2003, General Khin Nyunt put forward a
14 seven-point roadmap for political transition in Myanmar. Moreover, the National Convention,
suspended since 1996, was reconvened. From the late 2003, Beijing launched a more
assertive policy towards Myanmar with encouragement to Yangon to begin political
transition. At the same time, the Chinese government continued to defend Myanmar in the
international and regional forums and provided more development assistance. Khin Nyunt’s
visit to China in 2004 paved the way for more friendly development of bilateral relations
between China and Myanmar with signing twenty-one agreements, contracts, and
memorandum (Myoe, 2010).
Surprisingly, Prime Minister Khin Nyunt was purged and imprisoned on 18
October 2004 because of corruption charges. In fact, a number of reasons, including
irreconcilable factional tensions, and rivalries between the intelligence corps and the infantry,
Khin Nyunt’s increasing departure from the norms of collective leadership and collective
responsibility, and his failure to share credit for more progressive government policies led to
the dismantling of Khin Nyunt’s military intelligence establishment (Myoe, 2011).
Consequently, the implementation of Myanmar’s democratic plan was delayed. Moreover,
the removal of Khin Nyunt was assumed that Myanmar-China relations would be reluctant as
he was regarded as an architect of Sino-Myanmar alignment. However, the Depayin incident
and the purge of Khin Nyunt moved forward to tighter embrace between the two countries,
instead of weakening their relations. Besides, Chinese economic role in Myanmar broadened
owing to the US and western imposition of very tough new sanctions. ASEAN members
forced Myanmar to relinquish its chairmanship of ASEAN in 2005 (Storey, 2011). In 2007,
the Saffron Revolution occurred through protesting the unannounced decision of the SPDC
government to increase the price of diesel and petrol. However, this movement was
surrendered under the cruel suppression of the junta. The outbreak of this revolution pushed
Myanmar and China into friendlier and closer cooperation. This is because China-Russia
15 double veto shielded Myanmar from the draft resolution undertaken by the US and UK at the
UN Security Council (Haake, 2012).
On Jun 2009, Vice General Maung Aye’s Visit to Beijing focused on
deepening bilateral relations and seeking Chinese understanding of the government’s policy
towards ceasefire between ethnic-based groups along the China-Myanmar border. Moreover,
after meeting with Premier Wen Jiabao, Maung Aye signed several agreements and MOUs
including an agreement on economic cooperation, an agreement on Development, Operation
and Transfer of Hydropower Projects on Ayerwaddy River and a Memorandum of
Understanding on the Development, Operation and Management of Myanmar–China Crude
Oil Pipeline Project. In the same year, Chinese Vice–President Xi Jinping paid a reciprocal
visit to Yangon. During his visit, the two leaders stressed their close and friendly relations by
signing sixteen documents comprising five agreements on trade, economic matters, transport
infrastructure, technical cooperation and purchase of machinery; seven financial agreements;
three agreements on hydroelectric power; and one agrees on the energy sector and oil and
natural gas (People’s Daily Online, 2009). Moreover, Xi Jinping disclosed a fourfold
proposal, which focused on maintaining high-level contact, deepening reciprocal cooperation,
safeguarding the peace and prosperity of the border area, and strengthening coordination on
international and regional affairs (Myoe, 2011)
In 2010, Chinese Premier Wen Jiabao made a state visit to Myanmar in order
to commemorate the 60th anniversary of China-Myanmar relations. During his visit, Wen
also witnessed the signing of fifteen MOUs and agreements for cooperation in economic
development and technology sectors, rail transportation, trade, hydropower, energy and
mining (Ministry of Foreign Affairs of the People Republic of China, 2010). The year 2010
provided several reciprocal top level state visits for promoting their multi-sectoral
cooperation. In sum, the Myanmar government undertook the enhancement of the close and
16 friendly relations with China through their reciprocal state visits for the sake of its regime
survival and China’s backing to shield Myanmar from international criticism. At the same
time, the government sought to maintain its sovereignty and independence and to minimize
over-dependence on China by diversifying its external relations with Russia, India, and
ASEAN countries.
4.1. Economic gains from China
Closer economic ties with China play an important role in Myanmar’s foreign
policy goals. Economic cooperation between Myanmar and China has also improved
dramatically during the post-1988 period. Bilateral trade has been beneficial for both
countries and escalated rapidly since the 1990s (Gansen, 2011). Chinese president Jiang
Zemin’s visit in 2001 to Myanmar opened a new phase of bilateral economic relations. China
and Chinese enterprises have been involved in Myanmar’s industrial, infrastructure and
energy development through economic cooperation. By late 2002, Chinese companies had
officially launched more than 800 projects with a total value of US$ 2.1 billion. In 2003,
China also offered a US$ 200 million preferential loan to finance construction of one of
Myanmar’s largest planned hydropower projects at Yeywar near Mandalay after Senior
General Than Shwe’s visit to Beijing (Haacke, 2010).
China’s economic and development cooperation were focused on three main
fields including infrastructure development, providing to State-Owned Economic Enterprises
(SEEs), and energy exploitation. Chinese companies built six hydropower plants and one
thermal power station for the period between 1996 and 2005. The Ayeyawaddy River
Transportation Project, which links Yunnan to Thilawa Port, Yangon, is the most significant
economic cooperation with China in infrastructure development. Myanmar achieved Chinese
supports in constructing state owned factories, such as textile mills, plywood plants, rice mills,
17 pulp and paper mills, agriculture equipment factories and other light manufacturing factories
through the economic cooperation programs. In order to fulfill China’s quest for energy,
Myanmar plays a strategically important role for China (Kudo, 2006).
In 2001, China National Petroleum Cooperation (CNPC) started to invest in the
onshore Pyay oil field to boost production.
In 2004, China Petroleum and Chemical
Company and Myanmar Oil and Gas Enterprise (MOGE) of the Ministry of Energy signed a
production sharing agreement to exploit an on-shore field near Kyauk Phyu. Moreover,
between 2004 and 2005, the China National Offshore Oil Corporation (CNOOC) signed
contracts for production sharing with MOGE. In 2007, CNPC signed with MOGE contracts
on production sharing for three crude oil and natural gas exploration projects off the Rakhine
coast. In addition, Petro China attained the sole purchasing rights for an estimated six trillion
cubic feet of natural gas in the Shwe offshore field. Myanmar energy sources are vital for
China not only as a convenient alternative to oil and gas supplies from the Middle East, but
also for mitigating the country’s so-called Malacca dilemma. China imports 58 percent of oil
from the Middle East through the Malacca Strait. Thus it is the important shipping route for
carrying oil from the Middle East to China. However, over-reliance on the strait poses two
threats to China’s energy security. The first threat is the piracy and maritime terrorism and
the second one is the attempts of the powerful states to control navigation in the Strait of
Malacca. This is because the PRC is constructing the overland oil and gas pipelines from the
port of Kyaukphyu in Rakhine State to Kuming in Yuunan Province to bypass the Mlacca
Strait (Storey, 2011).
However, China is not the biggest foreign beneficiary, because Myanmar
also exports natural gas to Thailand through the pipeline and its estimated worth US$ 1.5
billion in 2005. In the same way, India also sought to secure Myanmar’s gas from the same
A-1 block, near Sittwe Port, Rakhine State. At last, India signed an agreement to purchase the
18 gas from Myanmar with more favorable conditions. Myanmar has achieved a diplomatic
advantage over neighboring countries through the oil and gas export offers (Kudo, 2006).
Since 2006, China has become Myanmar’s second largest trading partner after Thailand, and
in 2008 the total value of trade with China rose to US $ 2.63 billion, a 26.3% growth from
2007 (Gansen, 2011). Between 2008 and 2011, Chinese investment in Myanmar jumped
from US$ 1 billion to US$ 13 billion. The key projects (the Myit Son dam project, the CNPC
pipeline projects and Noricon’s Mongywa copper mine project) were together worth more
than US$ b8 million (Sun, 2012).
5. The Impacts of Political Reforms on Myanmar-China Relations
Myanmar reached a key turning point in 2011 with many amazing political
changes. Myanmar’s political reforms have contributed to positive changes internally and
externally. Internally, the new government of President U Thein Sein carried out various
dramatic reform procedures, including historical meeting with Daw Aung San Su Kyi,
granting of amnesty for political prisoners, relaxation of press and internet censorships, and
implementation of new labor laws that allowed unions and strikes (Sun, 2012). The landslide
victory of the National League for Democracy in the by-election of 2012 was the most
significant event in Myanmar’s political reform process. Moreover, the new government
achieved a ceasefire agreement with the Karen National Union that ended the world’s longest
running civil conflicts (Kyaw Yin, 2012).
Externally, the consequences of reforms have been effective that ASEAN
members have accepted Myanmar’s bid for ASEAN chair for 2014. Moreover, the
relationship between Myanmar and the United States warmed as the Secretary of State
Hillary Clinton paid a visit to Myanmar in December 2011 to encourage further progress. It is
the first visit by a US Secretary of State in more than fifty years. The United States restored
19 relations at ambassadorial level and lifted restrictions on the work of the IMF and the World
Bank in Myanmar. The EU lifted most of the sanctions imposed on the country. Furthermore,
the EU allowed most top Myanmar government officials to travel within EU countries. The
Australian government similarly lifted travel restrictions and encouraged other cooperative
steps (Talyor, 2012). Japan waived in debt of Myanmar and started the resumption of both
economic aid and private investment during Japanese Finance Minster, Tro Aso’s visit ( The
New Light of Myanmar, 2013).
Myanmar’s political reforms have also affected Myanmar-China relations in
political, economic and strategic terms. Myanmar leaders felt sensitive about China’s
overwhelming economic and political dominance in Myanmar. Thus, seeking to mitigate
Myanmar’s over-dependence on China was one of the factors that caused Myanmar to adopt
political reforms. In political terms, China did not expect the rapid political reforms in
Myanmar although there are close political and economic ties between Myanmar and China
(Sun, 2012). Beijing decreased the level and frequency of senior official state visits. Between
March 2009 and April 2011, four members of the Chinese Politburo Standing Committee
paid visits to Myanmar. However, there has been no visit paid by Chinese senior leaders
since then till September 2012 (Varma, 2011). The only one high level visit was paid by Wu
Bangguo, the Chairman of China’s National People’s Congress. Wu stressed three points of
bilateral relations: “to enhance bilateral strategic mutual trust,” “to push forward the agreed
major cooperation projects,” and “to deepen cultural and people to people exchanges” (Sun,
2012). However, the visit did not produce any major announcement about the bilateral
relations. Thus, Myanmar’s political reforms made bilateral relations between Myanmar and
China cool at the political level.
In economic terms, the suspension of the Myit Sone Dam project decided by
President U Thein Sein made China not only shocked China but also alerted not to neglect
20 Myanmar’s policy shift. The Thein Sein government sought to meet the public will and the
Western demand for democratic reform at the cost of partially sacrificing through the
scarification of Chinese economic interests. With repercussions from the Myitsone
suspension, the broad resentment against Chinese projects including CNPC oil and gas
pipeline project and NORICO copper mine project directly changed Chinese investment
behaviors. Moreover, Chinese companies faced with competition from American, European,
Japanese and Korean companies that are seeking into entering the last underdeveloped market
in Southeast Asia. “Myanmar analysts observed that China lost the Yangon–Naypyidaw high
speed railway contract to Japanese companies precisely because Naypyidaw lost its
confidence in the Chinese technology after the Wenzhou high-speed train collision in July
2011” (Sun, 2012).
China’s strategic interest in Myanmar comprised of Naypyidaw’s support for
China at the ASEAN plus three meetings and the Greater Mekong Sub-regional economic
cooperation as well as for its national “bridgehead” strategy that would turn Myanmar into
China’s outlet into the Indian Ocean with a potential for naval cooperation. Although China
attained most leverage in Myanmar due to the latter’s international isolation in the past,
currently Myanmar is grabbing the viable alternatives to balance China. China can no longer
take Myanmar for granted as its unconditional ally in order to enhance the Chinese regional
strategic agenda (Sun, 2012).
The engagement of the United States in Myanmar and their dramatic
improvement of ties undermined not only China’s strategic interests in Myanmar but also
China’s regional influence (Reuters, 2012). In early 2009, Southeast Asian analysts in China
reminded that the normalization of US-Myanmar relations could lead to threaten China’s
security, damage the existing China-Myanmar cooperation and indirectly hurt the security of
the Chinese border and energy transportation route (People’s Daily Online, 2009). Chinese
21 officials and scholars perceive the game as a zero-sum one and believe China’s downgraded
role in Myanmar today is a result of US manipulation to alienate China and Myanmar and is a
crucial component of the US pivot to Asia (Sun, 2012). At the same time, potential military
cooperation between the United States and Myanmar alerted China than anything else. In
addition to that, both the invitation of Myanmar to observe the U.S-led Cobra Gold joint
military exercise and the potential intelligence sharing between the CIA and Myanmar are
seen to be serious challenges to China’s national security (Bernstein, 2012).
In the changing context of Myanmar’s international relations, Myanmar has
not stood on the Chinese side to support China’s strength at ASEAN as Myanmar is now free
from its past over-reliance on China. Instead, Naypyidaw can now pursue its role devoted to
its ASEAN identity. “According to President Thein Sein’s advisor, Myanmar determines its
position on the South China Sea in accordance with its own national interest and solidarity of
ASEAN as the regional organization, implying that Myanmar has no intention to back up
China’s position.” China had only Cambodian support in seeking to block the attempt by the
Philippines and Vietnam to reference Manila’s recent naval standoff with China over
disputed Scarborough Shoal (Sun, 2012).
6. Conclusion
Myanmar has pursued a hedging strategy in the face of rising China since
1989. Temporarily, Myanmar has bandwagoned with China for the sake of regime survival.
However, Myanmar has always been cautious about the potential threat of its giant neighbor,
the rising China. Myanmar sought to maintain its sovereignty and national security by
playing its given geo-strategic location and the energy card. Moreover, Myanmar tried to
diversify its external relations with India, Russia and ASEAN countries for the sake of
attaining alternatives to mitigate its over-dependence on China.
22 Following domestic political reforms since 2011, Myanmar’s policy toward
China favored soft balancing underpinned by the rapid improvement of external relations
with the United States, the EU countries, and Japan. However, Myanmar will not alienate
China because Myanmar will seek to meet its economic interests and political interest by
recalibrating its relations with China, the United States and the other powers in the region.
Consequently, Myanmar will hedge with not only with China but also with any other power
in order to enhance its economic and political gains.
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